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Keeping tabs on California Business & PoliticsFri, 31 Jul 2015 13:40:54 +0000en-UShourly1Testing All the Arguments on SB 350http://www.foxandhoundsdaily.com/2015/07/testing-all-the-arguments-on-sb-350/
http://www.foxandhoundsdaily.com/2015/07/testing-all-the-arguments-on-sb-350/#commentsFri, 31 Jul 2015 13:34:47 +0000http://www.foxandhoundsdaily.com/?p=20217The Public Policy Institute poll boosted the argument for state governmental action on climate change – or so it seemed. Asked if likely voters agreed to reduce greenhouse gas emissions to 1990 levels by 2020 respondents liked the idea by 63% to 29%. Asked if the objectives set by SB 350 to require by 2030 that 50% of the state’s electricity come from renewable energy; petroleum use in cars be reduced by 50% and energy efficiency in buildings double, likely voters gave pollsters a loud affirmative: 74% on renewables, 63% on petroleum reduction and 68% on building efficiency.

However, that is as far as the poll went – it did not raise any consequences for the putting such mandates in place so there is no way to know how voters might react if they heard counter arguments.

It is one thing to ask if you like the idea of having ice cream at every meal and another to ask if you would accept ice cream at every meal if you understood that it could lead to weight gain and other potentially detrimental issues.

Hold the letters–I’m not comparing eating ice cream and greenhouse gases. But, you get the point about how answers might change depending on the information the poll respondents hear.

Perhaps voters would dismiss any negative arguments. They could think the goal of reducing greenhouse gases is paramount. They would also hear comments on what might happen if no action on climate change were taken. Yet, the issue of what effects SB 350 could have on the economy and the effects on poorer citizens is certainly part of the debate and was not tested in the poll.

I asked PPIC president and pollster Mark Baldassare why potential negative cost implications of rising gas prices were not included in questions about SB 350. He said without specific cost information at the time of the survey, PPIC chose to look at the overall tracking question on the job impacts of the state doing things to reduce global warming as an indicator of perceived impacts.

That question asked: “Do you think that California doing things to reduce global warming in the future would cause there to be more jobs for people around the state, would cause there to be fewer jobs, or wouldn’t affect the number of jobs for people around the state?”

The jobs argument will be central to the debate. Advocates for immediate action on climate change point to increased jobs in the relatively new industry of renewable energies; opponents claim jobs will be lost that rely on oil production both directly and indirectly.

Baldassare considered whether the poll numbers would change much if the negative arguments were included in the poll. He said, “I’m not sure if the responses would be different if the questions included the hypothetical pros and cons, and it may depend on how much of a benefit or how much of a cost is mentioned in these items.”

Follow Joel Fox on Twitter @1JoelFox1

]]>http://www.foxandhoundsdaily.com/2015/07/testing-all-the-arguments-on-sb-350/feed/0Fixing California – The Need For Tax Reformhttp://www.foxandhoundsdaily.com/2015/07/fixing-california-the-need-for-tax-reform/
http://www.foxandhoundsdaily.com/2015/07/fixing-california-the-need-for-tax-reform/#commentsFri, 31 Jul 2015 13:33:58 +0000http://www.foxandhoundsdaily.com/?p=20214(Editor’s Note: The Hoover Institutions’ EUREKA newsletter this month examines California’s Revenue Conundrum. The following article was one of a series of articles published discussing California’s tax system.)

From 2008 to 2009, California experienced its worse economic recession (dubbed by some as the Golden State’s “Great Recession”) since the tax system was first created in the 1930’s.

During this period, state tax revenues dropped precipitously, resulting in months of political struggle in Sacramento. Consequently, critical, publically-provided goods and services were curtailed and many Californians personally suffered as a result of the state’s budget predicament. Memories often fade, but I suggest this situation be kept in mind as we assess what has happened since, where we are now, and where we need to go in the future.

One response to the 2008-2009 situation by the legislative leaders and then Governor Arnold Schwarzenegger was to establish the Commission on the 21st Century Economy to recommend reforms to the California’s tax system. That Commission, on which I served as chairman, was bipartisan: seven Republicans balanced by seven Democrats. The mission was clear-cut: recommend reforms that would (a) lead to more reliable and stable revenue, (b) energize economic growth and job creation and (c) help California compete in the new economy.

After months of deliberation and public hearings, the Commission came to the broad policy conclusion that California’s revenues had become too dependent on the personal and corporate income taxes, which are generally more sensitive to fluctuations in the economy, and the stock market, than other taxes.

Moreover, we identified the following deficiencies in California’s current tax system:

It lags economic changes. While California’s economy has changed dramatically from manufacturing and agriculture to services, the basic tax system has not responded and has become increasingly dependent on a small percentage of high-income earners.

It produces revenues that are volatile, depending on fluctuations in housing and financial markets.

It discourages economic growth and investment.

These deficiencies have resulted in an uncompetitive business environment. To address each of these problems, the Commission’s recommendations included:

Reducing the personal income tax rates and reducing or eliminating many deductions.

Eliminating the corporate tax and the sales and use tax.

Establishing a broad, new business net receipts tax.

A 400-page report, including many other suggested reforms was produced; as was draft legislation that included a careful transition from existing tax policy to these reforms, and testimony before the State Legislature.

So what happened to these recommendations, you might ask? Despite the best efforts to make tax reform bipartisan, commonsense, and user-friendly for lawmakers not versed in economics and tax policy, no action was taken. Excuses were given, such as a certain new tax was too complicated or the timing was not right. Again, no action was taken.

Sadly, this isn’t the end of the story. Two years later, in 2011, another bipartisan group of 16 citizens came together under the Think Long Committee. After a year of study, these citizens unanimously came to the same conclusion regarding tax reform – we need to reduce the dependence on the personal income tax by reducing tax rates, eliminating most deductions, reducing the sales tax on goods, and establishing a broad-based tax on services.

In response to the recommendations of both the Commission and Think Long’s independent citizen’s group, both on which I served, what did our elected officials do? Exactly the opposite.

Given the chance to reduce rates and establish a more stable revenue system, they instead raised an extraordinary amount of money, created and passed a ballot initiative – namely, Proposition 30 – that retroactively and temporarily increased personal income tax rates, which will hurt business, especially small business, and will make an already volatile tax system even more unpredictable.

With tax revenues increasing, these officials now are claiming victory. In fact, many of them are saying that California provides a game plan for the country. My response: “Are you kidding?”

The main reason there appears to be a revenue “surplus” in California is that many taxpayers realized capital gains in 2012 – in part, because they knew the federal rate was increasing in 2013 – and the stock market has continued to outperform expectations.

However, Proposition 30 makes California more dependent on the most volatile tax form: the personal income tax. As history has shown, any short-term gains in revenue will give way to shortfalls as the stock market slows, the economy softens, and business sees that such tax policy helps create a climate that discourages investment in California.

Plus, Proposition 30 only increases the personal income tax rates runs through 2019. What then? Because the elected officials have not controlled spending, there will be another revenue hole that will put us back to the crisis of the past.

Supposedly, the timing wasn’t right for tax reform back in 2009, when the Commission released its report, because California was in a recession. Now, we’re told we can’t do it because we’re in a recovery. So when, if ever, will tax reform actually happen? I suggest the time has come for the public to demand that their elected officials do their job – take the cobwebs off both the Commission’s and the Think Long’s reports, and address tax reform.

The lesson I learned from delving into this topic is that, in the area of taxes, it’s easier for elected officials to do nothing or raise taxes “on the rich” than it is to reform our antiquated tax system. California deserves better. We need a government that sees this issue for what it is – critical to our children’s future – and has the courage to do what is best for the Golden State.

]]>http://www.foxandhoundsdaily.com/2015/07/fixing-california-the-need-for-tax-reform/feed/0Opponents of Mandatory Vaccination Bill Continue the Fighthttp://www.foxandhoundsdaily.com/2015/07/opponents-of-mandatory-vaccination-bill-continue-the-fight/
http://www.foxandhoundsdaily.com/2015/07/opponents-of-mandatory-vaccination-bill-continue-the-fight/#commentsFri, 31 Jul 2015 13:32:37 +0000http://www.foxandhoundsdaily.com/?p=20215Opponents of SB 277, the vaccinations bill, received the green light to begin collecting signatures to ask voters to recall State Senator Richard Pan. Backers need 35,926 signatures by December 31, which is 20% of the votes cast in the election of Pan in 2014. The last successful recall effort was that of Gray Davis in 2003, and the last one to qualify for the ballot was of Jeff Denham in 2007, when he was a state senator.

The lead proponent of the recall is Katherine Duran, a Sacramento parent who has also had a profile fight with her child’s elementary school over Common Core. She and 49 other residents signed the petition that launched the signature gathering effort.

The question now is whether or not backers of the recall effort will be able to raise the money necessary to gather the signatures in Pan’s district, which stretches from North Natomas to Elk Grove and West Sacramento to Arden-Arcade.

The fight against SB 277 was both a grassroots effort and a lobbying campaign by the California Chiropractic Association, which reports having paid Governmental Advocates $52,277 for lobbying since January 1. Supporters of SB 277 was a broad coalition of major health and education organizations, who have plenty of resources should a Pan recall actually end up on June 7 ballot.

It’s unclear if the chiropractors want to continue the fight by participating in the recall effort. Fighting a bill is very different than fighting a member, and politically, it would be very bad politics to help fund the effort, as it would be taking on a member of the Democratic majority in the State Senate and would have long-term consquences for the chiropractors.

There are also high profile celebreties, such as Jim Carrey, who could easily write a check to fund the effort if they want to. It’s unclear if there is such a backer yet, but we’ll be seeing any contributions of $5,000 or more.

Should the recall qualify and be placed on the June ballot, it won’t just be a question of whether voters want to retain Pan or not, but also who would replace him. And, that’s why a recall attempt would likely be unsuccessful. I can’t see any high-profile Democrat being willing to put their name on the ballot to replace Pan. Only when Democrats in this safe seat both a) disagree with SB 277 and b) see an alternative to Pan they would support, would he be recalled. And, the fact is neither criteria is likely to be met.

Hmmm…without getting into the politics of this particular recall, shouldn’t recall fundraising be limited to the district in which the elected official from which the official is proposed to be recalled? Perhaps not constitutional, but I’m just asking philosophically.

]]>http://www.foxandhoundsdaily.com/2015/07/opponents-of-mandatory-vaccination-bill-continue-the-fight/feed/0If You Care About California, Then You Should Care About Salinashttp://www.foxandhoundsdaily.com/2015/07/if-you-care-about-california-then-you-should-care-about-salinas/
http://www.foxandhoundsdaily.com/2015/07/if-you-care-about-california-then-you-should-care-about-salinas/#commentsFri, 31 Jul 2015 13:31:11 +0000http://www.foxandhoundsdaily.com/?p=20216Do you worry about the future of California?

Then you should worry about Salinas. Because if this Monterey County town of 155,000 can’t build itself a brighter future, it’s hard to imagine other struggling places doing the same.

“Rich in Land. Rich in Values. Ripe With Opportunity,” reads the slogan on a city website, and that’s no exaggeration. Salinas might be the richest poor city in California.

So many poor California cities sit well inland, but Salinas is just eight miles from the Pacific. It might have the best weather in the state. It’s part of the prosperous Monterey Bay region, and close enough to Silicon Valley that rising apartment rents have become a problem (a two-bedroom costs more in Salinas than it does in Seattle or Miami). And while many poor California places are rapidly aging, Salinas has the advantage of youth—its average age is less than 30.

It’s known as the Salad Bowl of the World, a center for producing healthy foods—leafy greens and berries—at a time when such foods have never been more popular. Jobs in the region’s $7 billion agriculture and tourism economies are so plentiful that employers have been complaining of labor shortages. It has a rich culture—from the dynamic Alisal neighborhood to an old downtown where a new headquarters for Taylor Farms is going up—and higher education, including an excellent community college and the newest California State University campus a 10-minute drive away. Salinas also has a healthy amount of civic engagement. Ask its residents where they’re from, and they’ll answer you with the name of their neighborhood—and a colorful description of it.

But ask people in Salinas why the city ranks so miserably low in so many measures—crime, schools, public health—and you’ll likely get puzzled looks.

By the numbers, Salinas borders on the nightmarish. Its homicide rate remains stubbornly high—nearly four times higher than the national average and more than twice as high as Los Angeles’; the year 2015 began with 10 shootings, including four deaths, in an 11-day period. Salinas and its neighboring communities in Monterey County have the highest rates of child poverty in the state. And Salinas lags significantly behind the state average in test scores, in its high school graduation rate, and the percentage of residents with bachelor’s degrees. Nearly 40 percent of Salinas residents have no high school diploma; the percentage statewide is 19 percent.

Salinas also has persistently higher unemployment than the state (8 percent vs. 6.3 percent currently) and a homeownership rate of less than 43 percent (compared to 55 percent statewide). In a bitter irony for a capital of healthy food, its obesity rates, especially among children, are well above the state average. And basic services can be hard to find. The federal government says Salinas is medically underserved—with not enough primary care doctors or dentists or mental health providers. And if you want to unwind or exercise in the fresh air, good luck. The city has one of the lowest ratios of parkland per resident in California, less than half the amount of L.A. or San Francisco (and eight times less than San Jose).

As a columnist traveling around California, this mismatch between its horrible statistics and its obvious strengths makes Salinas one of the most frustrating cities in California. And easily the most confounding. Why does Salinas add up to so much less than the sum of its parts?

Two of its handicaps are fundamental: it’s a small city and it’s in California. Salinas is one of 60 small cities in this state of between 100,000 and 300,000 people, too many of which are dysfunctional; Salinas’ municipal sisters include bankrupt Stockton and San Bernardino. The problems for Salinas-sized cities is that many started as smaller towns and grew to where they have all the problems of any urban place, while retaining the weak local governments and public resources of small towns. California’s governing system—which famously limits the power and discretion of local officials—imposes heavy regulations on local communities while giving city governments precious little power to shape their own destinies.

Salinas, to its credit, has more than its share of people who have tried to transform the community anyway. Many of its leading citizens were part of the 1970s farmworker movement—or are the children of those who were—and there is almost no constituency for the status quo in Salinas. People there know the city needs to change.

But, perversely, the ambitions of Salinas have served mainly to create more frustration.

People in Salinas are very good at starting things—launching new campaigns or programs, building new things. But finding the public resources to maintain them has been harder. Driving around town, you can see how Salinas is littered with public institutions it couldn’t quite sustain. A golf course that had to be taken over by First Tee. A public swimming pool that had to be taken over by a private aquatic club. (It’s still open to the public, but at limited hours and for a fee). A performing arts center that is now occupied by a charter school. At police headquarters, a cop tells me how the gang unit is being disbanded so that the understaffed department can have enough people on patrol.

And then, right in the center of the city sits the National Steinbeck Center, a monument to its native son, the Nobel Laureate John Steinbeck. It failed to meet very high projections for drawing tourists, and faltered. After a years-long ordeal that involved debt and foreclosure and fighting, it’s about to be rescued by California State University Monterey Bay.

The one lasting legacy of so many spasmodic endeavors is an ingrained sense of skeptical fatalism, particularly among the young in Salinas, who are the target audience of many ambitious programs there. Those who run such programs say they are often asked by young skeptics, “How long is this going to last?”

Salinas can count some victories. After its libraries nearly ran out of money in 2005, local fundraising and a vote for a sales tax increase rescued the libraries. Friends of the libraries, incidentally, have come up with one of the best ideas I’ve seen anywhere in California —mobile paleteros, or ice cream carts that move around the city dispensing books and library cards, and providing mobile Wi-Fi hot spots. More recently, Acosta Plaza, originally an owner-occupied housing development which fell on hard times, is being revived by a coalition of housing developers, young people, and community organizations.

Of course, Salinas has problems that are peculiar to it. While residents like to tout the size and wealth of the city’s agriculture industry, the hard truth is that for most, agriculture is an industry that doesn’t pay all that well, which is why agriculturally-oriented cities are typically poor and too often plantation-like in their social structure.

And while Salinas boasts remarkable diversity, it’s also been marked by segregation and racism. Monterey County was one of three California counties that, until very recently, had to get federal approval for changes in its election rules because of its history of voting discrimination against Latinos and Asians. And inside Salinas, the divide between a poorer and overwhelming Latino east side and the rest of the city is profound, and dates back across decades of racial and ethnic discrimination.

In this age of inequality, Salinas’s prosperous surroundings do it no favors. The economic successes of Monterey and the Bay Area can make the climb Salinas faces seem steeper than it really is.

It also makes people in Salinas feel isolated. Steinbeck wrote that the fog turned Salinas into “a closed pot” cut off “from the sky and from all the rest of the world,” a line that still gets quoted by residents even though their city is a California crossroads. It’s right on the 101, linking the coast and the agricultural inland, north and south. Even if you’ve never stopped to visit, you’ve almost certainly driven through.

Salinas is an All-America City, too. That’s not an opinion—it’s an official designation, issued just last month, by the National Civic League. And, suitably, it’s a double-edged award. It recognizes all the efforts in Salinas to address community problems—of which there is an all-American abundance.

Joe Mathews is California & innovation editor for Zócalo Public Square, for which he writes the Connecting California column. He wrote this for Thinking L.A., a partnership of UCLA andZócalo Public Square.

]]>http://www.foxandhoundsdaily.com/2015/07/if-you-care-about-california-then-you-should-care-about-salinas/feed/0Higher Fees, Bigger Government, Fewer Jobs: Regulation Isn’t The Path To Prosperityhttp://www.foxandhoundsdaily.com/2015/07/higher-fees-bigger-government-fewer-jobs-regulation-isnt-path-prosperity/
http://www.foxandhoundsdaily.com/2015/07/higher-fees-bigger-government-fewer-jobs-regulation-isnt-path-prosperity/#commentsFri, 31 Jul 2015 13:30:57 +0000http://www.foxandhoundsdaily.com/?p=20219An unfortunate fact of life in California is that every year, new attacks on business emerge from the State Capitol. There is plenty of evidence that demonstrates the damage this mentality has on our state and its working class. We have been recognized as the worst state for business for ten consecutive years by CEO Magazine and maintain one of the highest unemployment rates in the nation. United Way of California recently said that 31% of the state’s households struggle each month to meet basic needs. Yet, we see no change in Democrats’ willingness to impose new burdens on businesses.

In fact, new laws that negatively affect our job climate are so common that the California Chamber of Commerce releases an annual list of “Job Killer” proposals, which highlights the worst bills making their way through the Legislature.

Two bills that would increase energy costs and the minimum wage are particularly concerning for me as a small business owner who has spent years dealing with the impact of newly passed laws that make it harder to run my business.

Affordable energy is critical for a growing economy because its cost affects just about every business and consumer. Despite the fact Californians already pay the nation’s highest gas prices at $1 more per gallon than the national average (according to triple AAA on 7/29), and have some of the highest electricity rates, there is legislation dangerously close to becoming law that will only drive prices higher.

The legislation, known as Senate Bill 350, would require California by 2030 to reduce its gasoline use by 50% and would mandate that 50% of electricity supplies come from renewable sources. If we think costs are high now, these new mandates would add billions in costs to consumers per year for gas and electricity.

In addition to squeezing families’ budgets, businesses would be some of the hardest hit. Industries like manufacturing, construction and countless others that provide good-paying middle class jobs will be placed at a huge competitive disadvantage with other states. This will continue to drive thousands of jobs out of the state and many others will be lost or diverted to other states with lower costs.

It is unrealistic to think that we can reduce gasoline consumption by 50% in the next 15 years. There is no viable technology to replace gasoline-fueled cars on a large scale in that timeframe. The only feasible approach is to make driving prohibitively expensive for the working and middle class. The damage this proposed law would do to California’s economy would be catastrophic, yet the State Legislature seems undeterred and is close to sending the bill to Governor Brown for final approval.

If rising energy costs were not daunting enough, a new minimum wage increase has also been proposed. Senate Bill 3 would increase the minimum wage by another $3 over the next two years despite an increase to $10 per hour that’s set to begin in 2016.

Despite these efforts to theoretically help low-income workers, countless studies have shown that increasing the minimum wage often results in job losses and an increase in prices to offset the impact of wage increases. State leaders must begin to understand that the government cannot regulate its way to prosperity, as laws like these reduce the number of workers businesses can afford to hire in addition to raising costs for consumers. If California wants to reduce its high rate of poverty, the best way is to make sure every worker can find a good-paying job. Making energy more expensive and squeezing businesses with minimum wage increases among countless other government-imposed burdens will surely not help us reach this goal.

]]>http://www.foxandhoundsdaily.com/2015/07/higher-fees-bigger-government-fewer-jobs-regulation-isnt-path-prosperity/feed/0The Uncertain Futures Of Propositions 13 And 30http://www.foxandhoundsdaily.com/2015/07/the-uncertain-futures-of-propositions-13-and-30/
http://www.foxandhoundsdaily.com/2015/07/the-uncertain-futures-of-propositions-13-and-30/#commentsThu, 30 Jul 2015 13:34:16 +0000http://www.foxandhoundsdaily.com/?p=20209(Editor’s Note: The Hoover Institutions’ EUREKA newsletter this month examines California’s Revenue Conundrum. The following article was one of a series of articles published discussing California’s tax system.)

Two of California’s historical ballot initiatives – one brought by government outsiders to limit government revenue, the other brought by government insiders to expand government revenue – face an uncertain future if changes to these laws appear on the 2016 ballot.

The legendary Proposition 13, passed overwhelmingly by the voters in 1978, was a tax revolt heard round the world. While limiting property taxes in California – to 1 percent of the acquisition price of property with annual tax increases of up to 2 percent depending on inflation – and setting strict vote requirements before other taxes could be raised, Proposition 13 also served as a springboard for centering the tax issue in national politics. The late Martin Anderson, a Hoover Institution Senior Fellow and top advisor to Ronald Reagan, told me that following the passage of Proposition 13, “The idea of Reagan cutting taxes was now politically viable and rolling. Proposition 13 was a clear political signal that the public was fed up with taxes.”

In the nearly four decades since Proposition 13 passed, it has been declared the “third rail” in California politics – any politician touches it risks defeat at the hands of voters. But now, SCA 5 – introduced by State Senators Holly Mitchell and Loni Hancock and supported by public labor unions and grassroots liberal organizations – is geared to alter the piece of Proposition 13 that covers commercial property. Proposition 13 treats commercial and residential property the same, just as they were treated prior to its passage.

The proposal would phase-in full assessment of most commercial property requiring annual reassessments to full market value. In an attempt to quell small business opposition, SCA 5 allows for a $500,000 exemption on personal property taxes used for business purposes such as machines. While small business might be pleased with the latter provision, substituting the exemption for the uncertainty of an annual, subjective, reassessment is no bargain for them.

Proponents claim it is only fair to close so-called loopholes dealing with business. They often refer to property deals constructed where no one owner takes possession of 50 percent of a commercial property so that the property is not re-assessed as required by Proposition 13 when change of ownership occurs. The provision determining change in ownership was set by the legislature; hence, it can be changed statutorily. But last legislative session, when an effort to do so was proposed by Democratic Assemblymembers, it stalled. There is renewed interest in pursuing this option again, but the outcome likely won’t be different. Certain interests – particularly public employee unions – do not want a fix this problem; they want to reassess all commercial property.

There is little chance that the proposed constitutional amendment will receive the two-thirds legislative vote necessary to make the ballot. Republican legislative leaders have stated that their caucuses oppose the change. There is doubt about how many Democrats would be willing to touch the “third rail” given that the measure’s fate in the legislature seems pre-ordained.

Even so, voters may have an opportunity to approve or reject a change to Proposition 13. The same public unions and grassroots groups that hailed SCA 5 are preparing to file their own initiative if it fails in the legislature. If the proposal makes the ballot it is sure to face a well-funded opposition from both the business and taxpayer advocate communities. In a recent PPIC poll, the idea of changing Proposition 13 to annually reassess commercial property while leaving the residential property tax as is (called the split roll) found favor with only 50 percent of respondents. Even without arguments offered about possible negative consequences – such as thousands of lost jobs – a split roll doesn’t start from an encouraging position for proponents.

In 2012, Governor Jerry Brown led a coalition of public unions and government program advocates with some business support to pass Proposition 30, a $6 billion a year tax increase. Proposition 30 raised personal income taxes for seven years on taxpayers with taxable incomes of $250,000 or more. It also increased sales taxes by a quarter-cent for four years. Key to the “Yes on 30” argument was that the tax increase was needed to help the state recover from the Great Recession, a focus on funding education, and the text of the initiative stating that the funding would be temporary.

However, current discussions led by teachers unions are to extend or make permanent the Proposition 30 taxes. They argue California school funding would be jeopardized if Proposition 30 were allowed to expire with advocates talking about falling off a “fiscal cliff” if Proposition 30 ends. Analysis by both Standard and Poor’s and the Legislative Analyst’s Office determined that the state’s economic growth would avert this “fiscal cliff” scenario. Governor Brown, publically, is keeping to his pledge not to delay the temporary tax’s expiration.

However, there are two scenarios in which the taxes could continue. One would be another initiative measure to lengthen or make permanent the temporary status of Proposition 30. The second is to change some of the details of Proposition 30 – say eliminate the sales tax increase and cut a percentage off the income tax increase – and introduce it as a new tax, not as severe, but something needed to fill the hole created by the end of Proposition 30, which could open a loophole in Governor Brown’s pledge to gain his support. Proponents, though, may run into problems with voters on extending Proposition 30. The same PPIC poll found that 47 percent of respondents would oppose extending the tax with another 16 percent saying they’d oppose efforts to make it permanent.

One of the unusual aspects driving the Proposition 13 split roll and Proposition 30 extension discussions is the difference of opinions and strategies amongst public unions. Teachers unions have been the biggest beneficiaries of Proposition 30. But other unions, such as the SEIU, feel left out. A property tax increase would benefit its members, especially on the local government level. Some of the effort behind the Proposition 13 split roll may be a maneuver by these public unions to force the teachers unions to work together on one tax issue that would benefit all public labor groups. If two tax increases end up on the ballot there is less likelihood either would pass.

With little hope of either of these tax provisions passing out of the legislature, thanks to the Democrats losing their two-thirds majority in 2014, any action will take place on the ballot. But first, proponents must get the measures onto the ballot, which will be the first test of the issues’ public sentiment.

In these good times, the state, local governments, public schools and our universities are raising taxes, boosting tuition and cutting services to pay rising employee retirement costs. Between 2003 and 2013, combined annual pension costs have nearly tripled, from $6.43 billion to $17.5 billion.

The State Controller also reports nearly $200 billion in unfunded liabilities for state and local pension obligations. California Common Sense calculates another $150 billion of unfunded liabilities for state and local retiree healthcare obligations. That’s $350 billion in unfunded legacy liabilities that are driving massive cost increases, again:

CalPERS has told its agencies to be prepared for increases in their contributions for 50% over 5 years.

CalSTRS has told school districts to prepare for increases of more than 100% over the next few years.

And those warnings are for optimistic scenarios that still assume investments will earn 7.5% annually during the next 30 years.

From a purely financial perspective, retirement promises and their debts are driving California’s fiscal crisis – but politicians are the real problem, unable to say “no” to the powerful government labor union bosses that fund their campaigns and then make expensive demands at the bargaining table.

Without immediate reform, California faces a future of even higher taxes and fewer services. Some local governments already face service delivery insolvency and bankruptcy.

Our bipartisan coalition believes voters must be given a voice in important government employee compensation and benefits decisions and politicians should ask voters before making expensive, life-long retirement promises to new employees. That is why we are placing a statewide initiative on the ballot in 2016.

The initiative provides a “check” on state and local politicians who too often cave into union bosses’ expensive, unsustainable demands.

Our initiative prohibits the enhancement of existing pension benefits or the granting of lifetime pension benefits to new employees without voter approval. The measure prohibits taxpayers from paying more than 50% of new employee retirement benefit costs – unless voters authorize a higher contribution.

Recent efforts by some California communities to reform government compensation and benefits have been thwarted. In San Jose and San Diego, state agencies tried to keep pension reform measures off the ballot and have obstructed voter-approved reforms. In Ventura County, a state law was used to stop voters from even considering a reform package.

Our moderate initiative also prohibits government pension boards from penalizing public agencies that close their pension plans to new members, a common tactic to maintain the status quo.

CalPERS did that in the Stockton bankruptcy by claiming a $1.6 billion fee when the unfunded liabilities were only $400 million. When San Jose wanted to stop putting elected officials into a small CalPERS pension plan, CalPERS demanded $5 million for a $900,000 liability. Other cities across the state have received similar CalPERS demands, making it too expensive to put new employees into defined contribution plans.

Our initiative proponents are a bipartisan group of current and former elected officials who understand the devastating impacts that skyrocketing costs have on essential services. We know the brutal budget math grows worse if California continues down this unsustainable path. Cities all over the state need the power to control the cost of retirement benefits for new employees to offset the skyrocketing costs for current employees and protect essential services.

Of course, public employee union operatives have already launched personal attacks and Wall Street conspiracy theories to confuse the voters. Despite union rhetoric, this modest measure will not end defined benefit plans; it simply requires voters to approve adding new members.

This week the Legislative Analyst confirmed that our measure puts voters in the driver seat – and that the mandatory requirements of the measure would produce “significant savings.”

Even better, in addition to what is specifically mandated by the measure, the LAO confirmed that voters would have new powers to add to the savings.

Government union bosses are desperate to protect their gravy train at taxpayers’ expense. That’s why they are spinning a web of lies about the measure.

Astonishingly, the government union bosses even going so far as to claim voters will opt to spend MORE money than the politicians if given the new powers our initiative grants the people.

At the core of their argument, the unions, along with the politicians, are arguing that voters might make bad decisions with the new powers our initiative grants them. Telling voters they cannot be trusted to make good decisions is not exactly a winning message.

How much worse can we get beyond the disastrous decisions already made by the politicians who have been bought and sold by the labor unions? That’s a debate we are looking forward to having in 2016!

Fortunately, no amount of misinformation can change the plain English requirements of the Voter Empowerment Act.

Ultimately, we trust the voters to chart a responsible financial future. And that’s why our initiative is an important step on the long path to fixing California’s unsustainable public employee retirement benefits.

Chuck Reed, a former Mayor of San Jose, is a Democrat. Carl DeMaio, a former Councilmember of San Diego, is a Republican

In clandestine videos, you saw Planned Parenthood officials haggling over fetal organs and suggesting to ask their surgeons to use procedures that were “less crunchy” in order to keep the child’s body “intact.” They are procedures, they admit, that violate their patient agreements, but at the right price their organization’s objections could be dropped.

From the sidelines, crisis communication specialists observed how this multimillion-dollar, 100-year-old organization with millions of supporters and tremendous political clout would handle its publicity crisis.

After watching Planned Parenthood’s president, Cecile Richards, sit-down interview onABC’s “This Week with George Stephanopoulos” and reading the news coverage that followed, the organization went with what seemed to be a conscious decision to ignore the content of the videos and focus instead the videos’ creator – Center for Medical Progress (CMP). It was a shoot-the-messenger approach destined to fail.

This type of response will only prolong the controversy, because it fails to focus on the critical issue of trust. Its failure will grow to intolerable hypocrisy when CMP releases its additional dozen or so additional Planned Parenthood videos.

Setting aside any political, religious or personal viewpoints on abortion, this blossoming controversy is severely damaging Planned Parenthood’s image and work because the videos’ content raises the question of whether the patient-doctor relationship is based on trust or money.

For more than 98 years, Planned Parenthood had billed itself as a health center in underserved communities and as a place of last resort for unintended pregnancies. The degree of confidentiality and trust between the organization and its patients is critical to its core mission.

Rather than take time during ABC’s internationally televised news program to reassure its patients and begin rebuilding trust with the general public, Richards spent the majority of the interview calling CMP a group of “militant anti-abortion activists,” that used “very highly edited videos, sensationalized videos to try to impugn and smear the name of Planned Parenthood.”

Yes, the summary videos are highly edited but as George Stephanopoulos and others including CMP noted, full and unedited videos were simultaneously made public on online.

In addition, even if CMP is a pro-life biased group of “militant anti-abortion activists,” that charge doesn’t get to the heart of questions about why Planned Parenthood officials seemed to be haggling over fetal organs and waiving doctor-patient protections.

The CMP videos bring up ethical and health questions. By suggesting modified medical procedures that enable the sale of intact fetal organs without the patient’s knowledge or consent, Planned Parenthood stands in violation of the trust of their patients, the general community, their financial supporters and those who support and advocate for their cause.

Simply reprimanding the Planned Parenthood officials in the videos is not enough. Planned Parenthood needs to fire their responsible personnel and distance themselves from their viewpoints, publicly.

It must also publicly and privately reassure its patients that their safety and health is paramount to the organization. It should suspend its fetal organ program until a new set of guidelines and procedures compliant with the law can be established.

Finally, it requires entirely new ethical guidelines that bind its employees to prevent such events from every occurring again.

Planned Parenthood can’t just go out and attack the messenger by calling the group radical and extremist anti-abortionists. The clear, white light of truth shown in the videos makes such a response look self-serving and irresponsible. They need to tackle their greatest vulnerability straight on: Planned Parenthood’s officials’ willingness to violate ironclad patient agreements in exchange for a favorable fetal organ price and the revenue it delivers to those in charge.

Hector Barajas is a partner with RCI Public Affairs. With decades as a political insider and expert in policy strategy, his views are shared on all media platforms and as an on-air analyst for Univision and Telemundo. In 2012, the Hearst Corporation recognized Hector as one of the 20 Latino Political Stars nationwide. In 2014, Campaigns and Elections magazine named him one of the Top 50 Influencers in the United States.

]]>http://www.foxandhoundsdaily.com/2015/07/planned-parenthood-controversy-deserves-more-than-a-reprimand/feed/0The CTA Empire Strikes Backhttp://www.foxandhoundsdaily.com/2015/07/the-cta-empire-strikes-back/
http://www.foxandhoundsdaily.com/2015/07/the-cta-empire-strikes-back/#commentsThu, 30 Jul 2015 13:31:24 +0000http://www.foxandhoundsdaily.com/?p=20205Emperor Palpatine: There is a great disturbance in the Force.Darth Vader: I have felt it.Emperor Palpatine: We have a new enemy, the young Rebel…Darth Vader: How is that possible?Emperor Palpatine: Search your feelings, Lord Vader. You know it to be true. He could destroy us. The Force is strong with him.– Quote (edited for brevity) from Star Wars Episode V: The Empire Strikes Back, 1980

There are indeed great disturbances in the force. There are indeed challenges to the imperial monopoly that, for nearly 40 years, has eroded the quality and escalated the costs for California’s system of public K-12 education. And the imperial stormtroopers who enforce their educational edicts on California’s state legislature, its thousands of public school boards, and by extension, millions of parents and children, are all part of an evil empire called the California Teachers Association, or CTA. In plain English, the teachers union.

A comprehensive summary of just how harmful the CTA has been to California’s young students can be found in a 2012 report “The Worst Union in America,” by Troy Senik, published in City Journal. Senik explains how it all began:

“The CTA began its transformation in September 1975, when Governor Jerry Brown signed the Rodda Act, which allowed California teachers to bargain collectively. Within 18 months, 600 of the 1,000 local CTA chapters moved to collective bargaining. As the union’s power grew, its ranks nearly doubled, from 170,000 in the late 1970s to approximately 325,000 today. By following the union’s directions and voting in blocs in low-turnout school-board elections, teachers were able to handpick their own supervisors—a system that private-sector unionized workers would envy. Further, the organization that had once forsworn the strike began taking to the picket lines. Today, the CTA boasts that it has launched more than 170 strikes in the years since Rodda’s passage.”

With 325,000 members paying, on average about $1,000 per year, the CTA runs an empire sustained on dues revenue of over $25 million per month. This permits them to fund political campaigns, educational campaigns, and legal battles, with almost no constraints based on cost. They have enough money to fight on all fronts, everywhere, all the time. And they do.

Back to Troy Senik, on how back in 2010 the CTA squelched a parent trigger campaign by activist parents in Compton.

“In 2010, when 61 percent of parents at McKinley Elementary School in the blighted L.A. neighborhood of Compton opted to pull the trigger, the CTA claimed that ‘parents were never given the full picture . . . [or] informed of the great progress already being made’—despite the fact that McKinley’s performance was ranked beneath nearly all other inner-city schools in the state. Several Hispanic parents in the district also said that members of the union had threatened to report them to immigration authorities if they signed the petition. Eventually, the Compton Unified school board—heavily lobbied by the CTA—dismissed the petition signatures, with no discussion, as ‘insufficient’ on a handful of technicalities, such as missing dates and typos.”

Pretty nasty stuff, from a union whose rhetoric emphasizes their concern “for the children” and the “working families.”

“The Anaheim School District is appealing a judge’s flawed ruling in favor of a parent trigger effort based on outdated data and controversy over an administrative reassignment. The effort was organized in part by the law’s authors and has drawn support from political outsiders and extreme national figures including Newt Gringrich. Kudos to the strong members of the Anaheim Elementary Education Association who have worked fairly and openly to ensure that the local community has the facts regarding this flawed law and that parents who’ve been excluded from the process have a voice.”

Will the band of rebels in Anaheim have the resources to fight the union’s appeal? The union knows they can wear them down. Twenty five million dollars a month buys a lot of attorneys, along with state and local politicians.

But unlike in episode five of the famous Star Wars saga, the rebels aren’t just fighting on one planet. There’s trouble all over the galaxy.

REBEL CAMPAIGN #2 – FRIEDRICHS VS. THE CTA

For example, later this year, the U.S. Supreme Court will hear the case “Friedrichs vs. the CTA,” which challenges the right of government unions to charge mandatory “agency fees.” As it is, teachers can endure a laborious “opt-out” procedure to avoid paying the “political” portion of their dues, which is about one-third of the total dues. But they still have to pay the agency fees which pay for allegedly non-political activities such as educational programs. litigation, and collective bargaining. The Friedrichs case, and it’s a strong one, argues that collective bargaining with local governments is inherently political. To give you a taste of what sort of attitudes are spawned by the CTA Empire’s monstrous deluge of misleading us-vs-them rhetoric, here’s a comment posted on a UnionWatch article authored by Friedrichs, “Teachers Stand Against Union Tyranny“:

“…she is a plant who is voicing the concerns of the extremists in America who want to do away with the middle class and working poor. She is nothing more than a bought and paid for goon of the Koch brothers and groups like theirs. If I worked with this rat I would make her so unwelcome in so many ways that she would seek out the right wingers she has sold her soul too and leave teaching. She is a gutless, repugnant, two faced, scumbag. She needs a punch in her ugly lying face. What a skank.”

Wow. Funny how the reformers are so often tainted as “haters.” But apparently this is not the hate the stormtroopers are looking for, so they’ll move along now.

REBEL CAMPAIGN #3 – VERGARA VS. CALIFORNIA

The galaxy is a big place. Rebellious planets abound. Along with Palm Lane and the Friedrichs case, working its way up the California appellate system is Vergara vs. California. The plaintiffs prevailed in this case in Los Angeles superior court last year, but a final decision may not come until 2016. Vergara argues that lifetime tenure – awarded after less than two years in the classroom, dismissal procedures that make it nearly impossible to fire incompetent teachers, and “last in first out” layoff policies that reward seniority over merit, have harmed California’s children. They further argue that these policies have a disproportionate negative impact on students from disadvantaged communities. Watch these closing arguments by the brilliant Marcus McRae, for everything you need to know about this important case.

Now take a look at how the CTA Empire struck back, in this excerpt from their press release announcing their plans to participate in an appeal to the Vergara ruling.

“From the beginning, this lawsuit has highlighted the wrong problems, proposed the wrong solutions, and followed the wrong process. This lawsuit was not about helping students, but yet another attempt by millionaires and corporate special interests to undermine the teaching profession and push their agenda on California public schools and students.”

California’s state legislature is filled with politicians who are, with rare exceptions, either wholly owned by the CTA, or tepidly support reform but stop short when it counts so they can avoid being individually targeted by one of the CTA’s imperial cruisers. As a result, the courts are one of the only places reform can begin. But court battles can cost even more than political campaigns.

REBEL CAMPAIGN #4 – BAIN VS. THE CTA

Nonetheless, here’s yet another rebellious planet in the CTA’s galaxy, lead by tireless reformer Michelle Rhee, in the form of “Bain vs. the CTA,” a case that argues the union cannot strip members of voting rights and discounted insurance benefits simply because they have opted out of paying the political portion of their dues. As education reformer Larry Sand writes for UnionWatch in his recent post “Bain Explained“:

“The Friedrichs case, with a possible Supreme Court decision next year, is much further along than Bain. If the former case is successful, it will be interesting to see what becomes of the latter. Friedrichs claims that all union spending is political and therefore joining should be voluntary. If it flies, teachers will have an option to join the union or refrain from doing so. That could take the wind out of Bain’s sails as there will probably not be the two tiers or classes of membership that there are now. If all dues are political and you join the union, then all fees will be chargeable and teachers couldn’t then opt out of the political portion because all of it would be political. However, should Friedrichs fail, Bain will be all the more important.”

The legendary Star Wars movie saga has been producing installments longer than most Americans have been alive. In the moral debate over how to manage California’s schools, the only difference between the CTA and Palpatine’s empire is that complementing the overwhelming raw power wielded by the CTA, there is a propaganda machine of unmatched potency. Along with equipping rebel armies with attorneys, reformers will have to tap the force of truth and pay the freight to spread their message across the galaxy, telling it in terms that win the hearts of parents everywhere.

]]>http://www.foxandhoundsdaily.com/2015/07/the-cta-empire-strikes-back/feed/0State Moonlights as Slumlordhttp://www.foxandhoundsdaily.com/2015/07/state-moonlights-as-slumlord/
http://www.foxandhoundsdaily.com/2015/07/state-moonlights-as-slumlord/#commentsThu, 30 Jul 2015 13:30:37 +0000http://www.foxandhoundsdaily.com/?p=20204If a recent study to determine the safety of 29 state-owned buildings tells us anything, it’s that the state is a terrible landlord. In fact, it may be time for government to get out of the building- owning business.

It shouldn’t take an act of the Legislature to get the state agency in charge of building maintenance to do its job. Without last year’s successful legislative push by former Assemblyman Roger Dickinson, it’s highly unlikely the Department of General Services would have commissioned the study by Hellmuth, Obata & Kassabaum.

A key reason for Dickinson’s legislation was the troubled state Board of Equalization’s headquarters at 450 N St., located a few blocks away from the site of the new Sacramento Kings arena.

For years, the 24-story BOE tower has been plagued with water leaks, sewage leaks and mold. Since 2012, scaffolding has ominously surrounded the building to protect pedestrians and employees from falling glass. The repairs will cost an additional $40 million on top of the $60 million already expended.

The study identified 11 state-owned buildings in worse condition than the BOE building. The worst is the 51-year-old State Resources Building in downtown Sacramento, which holds more than 2,300 state workers. The building is in such poor shape that the report calls for $148 million in spending this year to address deferred maintenance and safety concerns.

Sacramento Bee columnist Dan Walters observes that, unlike state facilities, most privately owned office buildings in Sacramento – even older ones like the Citizen Hotel – are well-maintained in order to attract tenants.

In the short-term, the study may spur some catch-up maintenance, but in the long run the same problems are likely to reappear because the study fails to diagnose why the state takes such poor care of its buildings.

Walters offers one possible explanation: “With captive tenants, no competition, no bottom line and uninterested political overseers, bureaucrats apparently felt no pressure to do their jobs correctly.”

Additionally, buildings are exempt from local building codes, inspections and enforcement mechanisms that cities use to crack down on deadbeat private property owners. Penalties range from fines to jail time. But not for government; the state gets to play by a different set of rules.

Finally, there just isn’t much incentive for politicians to spend money on buildings. Building maintenance isn’t a sexy issue, and it’s going to lose nearly every time when competing with popular programs for limited funds. Most lawmakers prefer to spend public dollars in ways that communicate they’re tackling major issues for the voters who elected them.

Case in point: Despite receiving billions in surplus revenue, the governor and Legislature chose not to tackle the state’s facility problems in the record $115 billion state budget approved in June.

The neglect of government-owned facilities isn’t a new or partisan issue. Democrat and Republican lawmakers are equally responsible for the poor condition of many state-owned buildings.

The federal government has problems managing its buildings, too. In 2012, the U.S. Government Accountability Office estimated that 77,000 empty or underutilized buildings may cost taxpayers $1.7 billion a year. Although some steps were taken to address the problem, the GAO warned again this year that “the underlying challenges remain.”

Given its poor track record, the state ought to reconsider whether it should own buildings. Rather than build new buildings or try to repair existing ones, the state should lease the space it needs from private-sector firms who know how to take care of their property.

A government that does few things well should probably stick to doing a few things. And clearly taking care of buildings isn’t one of them.

George Runner represents more than nine million Californians as a taxpayer advocate and elected member of the State Board of Equalization.